Assessing Riot Blockchain Inc’s (NASDAQ:RIOT) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess RIOT’s recent performance announced on 30 September 2017 and evaluate these figures to its longer term trend and industry movements. Check out our latest analysis for Riot Blockchain
Did RIOT perform worse than its track record and industry?
I prefer to use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend allows me to analyze various companies in a uniform manner using the latest information. For Riot Blockchain, its most recent earnings (trailing twelve month) is -US$9.93M, which, against the previous year’s figure, has become more negative. Since these figures are relatively myopic, I’ve calculated an annualized five-year figure for RIOT’s net income, which stands at -US$9.11M. This doesn’t look much better, since earnings seem to have gradually been getting more and more negative over time.
We can further assess Riot Blockchain’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Riot Blockchain has seen an annual decline in revenue of -25.48%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Scanning growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 22.93% in the previous twelve months, and 20.37% over the previous five years. This means that any uplift the industry is enjoying, Riot Blockchain has not been able to leverage it as much as its industry peers.
What does this mean?
Though Riot Blockchain’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to forecast what will occur going forward, and when. The most valuable step is to assess company-specific issues Riot Blockchain may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Riot Blockchain to get a more holistic view of the stock by looking at:
- Financial Health: Is RIOT’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.